Michigan Laws 500.1007 – Annual audited financial report; contents; form; conduct of examination by independent public accountant
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Terms Used In Michigan Laws 500.1007
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Audited financial report: means the report required in section 1005 and furnished under section 1007. See Michigan Laws 500.1001
- Commissioner: means the director. See Michigan Laws 500.102
- Independent public accountant: means an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants and in good standing in all states in which the accountant or accounting firm is licensed to practice. See Michigan Laws 500.1001
- Insurer: means that term as defined in section 106 and includes a nonprofit dental care corporation operating under 1963 PA 125, MCL 550. See Michigan Laws 500.1001
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
(1) The annual audited financial report shall report the insurer‘s financial condition as of the end of the most recent calendar year and the results of its operations, cash flows, and changes in capital and surplus for the year then ended in conformity with accounting practices prescribed, or otherwise permitted, by the commissioner and shall include all of the following:
(a) The report of an independent public accountant.
(b) A balance sheet reporting admitted assets, liabilities, capital, and surplus.
(c) A statement of operations.
(d) A statement of cash flows.
(e) A statement of changes in capital and surplus.
(f) Notes to financial statements. These notes shall be those required by the commissioner’s annual statement instructions and accounting practices prescribed by the commissioner. The notes shall include a reconciliation of differences, if any, between the audited financial statements and the annual statement filed pursuant to section 438 with a written description of the nature of these differences.
(2) The financial statements included in the audited financial report shall be prepared in a form and using language and groupings substantially the same as the relevant sections of the insurer’s annual statement filed with the commissioner, may be rounded to the nearest thousand dollars, may combine insignificant amounts, and, except for the first year the insurer is required to file an audited financial report, shall be comparative, presenting the amounts as of December 31 of the current year and the amounts as of the immediately preceding December 31.
(3) The independent public accountant shall conduct the examination in accordance with generally accepted auditing standards. Consideration shall be given, as the independent public accountant considers necessary, to the procedures illustrated in the “Financial Conditions Examiners Handbook” prepared by the national association of insurance commissioners.